An extended-anticipated rotation into altcoins could also be underway amid improved regulatory readability, rising liquidity and a surge in onchain exercise, in line with Sygnum’s Q3 2025 Funding Outlook.
Geopolitical tensions and US fiscal uncertainty earlier this yr led to a sell-off throughout the altcoin sector. Nonetheless, altering market dynamics “might ignite the long-awaited altseason,” the digital financial institution mentioned within the report shared with Cointelegraph.
“As regulatory readability extends to altcoins, capital may rotate towards initiatives with actual financial use instances and sustainable token fashions, and maybe this shift is already underway as some sectors at the moment present,” Sygnum wrote.
The report additionally famous a decline in Bitcoin dominance, which hit its highest stage since 2021 amid geopolitical and trade-related macro pressures, however lately dropped over 6% amid capital return to altcoins.
Associated: GENIUS Act to spark wave of ‘killer apps’ and new fee providers: Sygnum
Bitcoin hits new highs on provide squeeze
The report mentioned that liquidity developments for Bitcoin (BTC) stay “extraordinarily bullish,” as a persistent provide and demand imbalance has pushed the biggest cryptocurrency by market worth to new all-time highs. BTC hit an ATH above $123,000 on July 14.
“Bitcoin Spot ETFs have now exceeded USD 160 billion in property below administration, accumulating greater than 110k BTC final quarter alone,” Sygnum wrote. Ether (ETH) adopted with falling change balances, ETF inflows and practically 30% of its liquid provide staked.
The Ethereum narrative shifted after a profitable Pectra improve, which “raised the staking cap and launched a number of protocol enhancements.” Regulatory readability has strengthened this pattern, because the US Securities and Change Fee clarified that protocol staking “doesn’t fall below securities legislation.”
Sygnum mentioned Ether has “conclusively damaged its long-term downtrend,” citing a surge in institutional demand. Sharplink is planning a $1 billion ETH allocation, and a contemporary wave of tokenization and stablecoin initiatives from Wall Road giants, together with BNY Mellon, Société Générale and a Trump-backed USD1 stablecoin, are launching on Ethereum.
Associated: BitMine’s $1B repurchase plan favors shares over extra ETH — for now
DEX market share hits 30%
Decentralized exchanges hit a report excessive final quarter, capturing 30% of all crypto spot buying and selling after memecoin launches pushed DEX volumes to $530 billion. The surge was led by PancakeSwap on BNB Chain, whereas Solana’s PumpSwap shortly overtook Raydium, the report famous.
DeFi lending additionally hit an all-time excessive of $70 billion locked, and liquid staking surpassed 30% of Ether’s provide. “The DeFi lending sector is among the strongest beneficiaries of market rallies, with energetic loans on Ethereum surging to new all-time highs as traders tackle larger danger and leveraged publicity,” Sygnum wrote.
Nonetheless, the financial institution warned that the present momentum in altcoins may spark one other memecoin bubble, which historical past suggests might finish in a pointy correction if it continues unchecked.
Journal: Crypto merchants ‘idiot themselves’ with worth predictions — Peter Brandt
